Transport.  Gen. 


Some  Difficulties  of  the 
Transportation  Business 


Address 

to  the 

Chamber  of  Commerce  of 
Ansonia,  Conn. 

by 

HOWARD  ELLIOTT 

Chairman  of  the  Board  and  President 

of 

The  New  York,  New  Haven  & Hartford 
Railroad  Company 


German  Hall,  Ansonia,  Conn. 
April  4,  1916 


Mr.  President,  Mr.  Toastmaster,  Mr.  Mayor  and  Members 
of  the  Ansonia  Chamber  of  Commerce: 

One  of  the  pleasant  things  about  work  on  a railway 
is  getting  away  from  the  office,  from  the  desk,  where  all 
difficulties  center  every  day  and  where  you  have  a 
picture  of  the  countless  problems  of  a complicated  system 
like  the  New  Haven.  It  is  a great  pleasure  as  well  as  an 
inspiration  to  the  officers  of  the  company  to  meet  the 
business  men  in  the  communities  the  company  is  trying 
to  serve  and  as  many  of  the  patrons  of  the  company 
as  possible.  It  has  been  a regret  to  me  and  to  many 
of  our  officers  that  the  storm  and  stress  of  the  last  two 
and  a half  years  since  I came  to  the  property  have  been 
so  great  that  it  has  been  difficult  to  get  about  on 
many  trips  of  inspection.  These  trips  are  productive, 
I think,  of  good  results  in  bringing  those  who  are  try- 
ing to  give  service  in  closer  contact  with  those  who  re- 
ceive service;  so  it  is  a pleasure  for  the  officers  who  are 
with  me  and  for  me  to  be  with  you  to-night. 

Mr.  Drew,  Vice-President  of  your  organization,  wrote 
me  a week  or  so  ago  and  asked  if  I would  come,  and  I 
found  my  engagements  such  that  I could.  I was  glad 
indeed  to  have  an  opportunity  to  come  into  the  Nau- 
gatuck Valley  to  spend  an  afternoon  and  evening  here; 
I am  going  on  north  to-morrow  morning.  He  then  wrote 
and  asked  what  would  be  the  subject  of  my  remarks.  I 
replied  that  I would  talk  about  some  of  the  difficulties 
confronting  the  transportation  business. 

Now,  as  your  toastmaster  has  said,  your  patience  has 
been  and  is  even  now  sorely  tried  and  you  know  from 
daily  experiences  some  of  the  difficulties  confronting  the 
transportation  business.  As  you  are  all  busy  men,  you 
have  trials  and  tribulations  in  your  own  affairs  and  per- 
haps you  do  not  give  sufficient  thought  to  some  of  our 
difficulties;  or  to  some  of  the  forces  now  at  work  which 


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make  it  hard  to  cure  those  difficulties.  As  the  subject  is 
vital  to  the  welfare  of  the  United  States,  the  welfare  of 
New  England  and  the  welfare  of  the  Naugatuck  Valley, 
and  to  every  manufacturer  in  it,  I thought  it  might  be  of 
interest  to  speak  of  it. 

The  Great  To  begin  with,  we  know  that  up  to 

Business  Boom.  less  than  a year  ago  business  through- 

out the  United  States  was  not  very 
good.  We  had  many  idle  freight  cars  all  over  the  United 
States.  We  had  many  idle  engines.  We  had  many  men 
unemployed  and  committees  in  various  cities  were  asking 
employers  of  labor  to  give  employment  to  men.  Many 
of  us  felt,  I know  I did,  business  would  improve,  but 
many  made  the  mistake  that  perhaps  I made — we  did 
not  realize  it  would  improve  as  fast  as  it  has.  Even 
as  late  as  the  first  of  August  last,  only  eight  months 
ago,  the  New  Haven  Road  had  200  engines  in  apple-pie 
order,  laid  up  in  what  we  call  white  lead  on  side  tracks 
with  nothing  to  do.  Then  this  business,  this  wonderful 
business  started.  One  hundred  million  people  of  the 
United  States  had  been  stimulated  in  their  activities  by 
the  demand  for  so-called  war  materials.  Then,  too,  the 
shelves  of  countless  storehouses  all  over  the  country 
had  become  depleted  of  all  kinds  of  goods.  The  buy- 
ing power  of  100,000,000  people  started,  and  this  busy 
New  England,  filled  with  manufacturing  enterprises, 
began  to  receive  orders.  In  this  valley,  which,  as  your 
toastmaster  says,  is  one  of  the  busiest  of  its  size  in 
the  world,  the  acceleration  of  business  was  perhaps 
greater  than  in  any  other  part  of  New  England. 
Knowing  I was  to  come  here,  I had  figures  com- 
piled typical  of  this  remarkable  business  growth,  and 
fortunately  for  me  the  man  who  compiled  the  figures 
linked  Ansonia  and  Derby  together,  so  I cannot  draw  a 
comparison  between  the  two.  (Laughter.) 

The  tonnage  for  January,  which  is  simply  a typical 
month  for  the  two  places,  increased  76  per  cent,  over 
January  a year  ago,  the  tonnage  of  Naugatuck  increased 


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85  per  cent.,  Seymour  147  per  cent.,  Union  City  39  per 
cent.,  Beacon  Falls  110  per  cent.,  or  an  increase  of 

86  per  cent,  for  the  group  of  points  in  which  you  are 
directly  interested.  That  was  a tremendous  uplift  in 
business  development.  The  railway  struggled  to  meet  it 
but  it  met  with  some  of  the  difficulties  you  have  met  in 
your  business.  It  has  had  labor  troubles;  we  have  had 
only  thirty-four  strikes  since  August  24 — not  very  many, 
but  quite  a number.  We  have  had  very  unusual  weather 
conditions,  and,  as  our  business  is  outdoor  business,  these 
unusual  weather  conditions  have  diminished  the  efficiency 
of  our  machine.  We  had  in  the  ninety-one  days  begin- 
ning December  1 and  ending  February  29,  fifty-eight 
that  were  either  snowy,  stormy  or  foggy.  A foggy  day  on 
the  New  Haven  Road,  while  it  does  not  always  trouble 
you  in  the  Naugatuck  Valley,  has  a direct  effect  on  the 
volume  of  our  business,  because  it  checks  everything  in 
New  York  Harbor  and  that  hacks  up  all  along  the  line. 
The  snowfall  especially  has  been  very  unusual.  In  the 
four  months  beginning  with  December  there  have  been 
seventy-four  inches  in  this  part  of  the  State ; out 
around  Poughkeepsie  there  were  more  and  up  in  the 
Pittsfield  country  very  much  more.  We  have  had  the 
same  trouble  you  have  had  in  getting  proper  fuel  and 
enough  of  it;  and  we  have  had,  as  I have  pointed  out, 
various  labor  troubles.  We  have  had  inadequate  facili- 
ties, as  you  well  know,  and  so  have  you. 

Freight  The  record  for  the  month  of  March, 

Congestion  in  which  has  just  closed,  shows  in  this  part 
Naugatuck  of  the  Naugatuck  Valley  that  we  had  a 

Valley.  daily  average  of  131  cars  of  freight 

placed  ready  for  unloading  by  the  own- 
ers of  freight,  and  the  average  number  unloaded  each  day 
by  the  owners  was  but  44  cars,  which  indicates  that  you 
too,  had  difficulties  with  your  labor,  with  your  teams  and 
with  your  machinery  in  getting  the  freight  taken  out  of 
the  cars  so  that  the  cars  could  go  on  their  way — 
taking  out  the  finished  product  for  you  and  bringing  back 


4 


raw  materials.  Now,  this  great  growth  of  business  was 
not  confined  to  the  Naugatuck  Valley,  for  at  New  Haven 
there  was  a growth  of  74  per  cent.,  at  Bridgeport  54  per 
cent,  and  at  Waterbury  81  per  cent.  I mention  these  three 
points  because  if  they  become  crowded  and  unloading  is 
slow  it  at  once  affects  you.  As  a result  of  these  condi- 
tions, our  service  either  passenger  or  freight  has  not  been 
up  to  the  mark.  We  feel  as  badly  about  this  as  anybody, 
perhaps  more  so,  because  it  tends  to  reflect  upon  us,  and 
yet  the  obstacles  have  been  almost  insurmountable.  Out 
of  this  trouble  let  us  hope  profitable  lessons  may  be 
learned. 

One  lesson  is  that  the  owner  of  the  freight  should 
realize,  if  he  wants  the  maximum  amount  of  use  of  the 
railway, — he  must  do  his  part  in  relieving  the  railway  of 
freight  when  it  comes  to  the  point  where  it  is  to  be  dis- 
charged. On  the  New  Haven  Road,  as  a whole,  for  the 
month  of  March,  we  had  placed  each  day  for  unloading 
approximately  13,000  cars.  Some  days  the  number  was 
as  low  as  11,813,  and  the  highest  figures  for  any  one  day 
in  that  month  were  13,905;  that  is,  freight  belonging  to 
you  and  others  all  over  Connecticut,  Rhode  Island  and 
Massachusetts,  for  your  men  and  your  teams  to  take 
away  to  your  factories,  warehouses,  etc.  The  unloading 
during  the  month  mentioned — the  highest  for  any  one 
day  was  4,600  cars  and  the  lowest  3,609;  you  see,  from 
30  to  40  per  cent.,  not  quite  40  per  cent.,  was  unloaded. 
Well,  that  is  a very  uneconomical  way  for  you  and  for 
the  railway  to  do  this  enormous  business,  and  it  can  only 
be  cured  in  two  ways : first,  by  the  railway  having  better 
facilities,  and,  second,  by  you  having  better  facilities. 

A Eecord  of  Let  me  give  you  a few  figures  for  March 

Loading  and  31  from  a daily  report  made  up  for  a 

Unloading.  special  committee  of  Railway  Presidents 

in  New  York,  of  which  I happen  to  be 
one,  and  for  a subcommittee  which  is  composed  of 
Interstate  Commerce  Commissioner  E.  E.  Clark,  Mr. 
Campbell,  a Vice-President  of  the  New  Haven  Company, 


5 


and  Mr.  Casey,  an  officer  of  the  Lackawanna  Road.  These 
three  and  this  committee  of  railway  presidents  are  try- 
ing to  get  the  maximum  use  out  of  all  railways  east  of 
Buffalo  and  Pittsburgh.  They  take  all  reports  of  con- 
gestion and  delays  and  consider  them  every  day  in  New 
York  from  nine  in  the  morning  until  six  in  the  evening. 
They  have  about  twenty-five  inspectors  traveling  over  the 
territory  mentioned  to  find  out  where  the  trouble  is  lo- 
cated. This  report  is  made  up  for  each  road,  and  par- 
ticularly for  this  New  England  section,  where,  because 
of  the  great  inrush  of  raw  material,  there  has  been  very 
serious  congestion.  At  New  Haven,  for  example,  on  that 
day  there  were: 

410  cars  ready  to  be  unloaded; 

242  unloaded. 

At  Bridgeport: 

292  ready  to  be  unloaded; 

189  unloaded. 

At  Hartford: 

436  ready  to  be  unloaded; 

163  unloaded. 

At  Waterbury: 

336  ready  to  be  unloaded; 

181  unloaded. 

At  New  Britain: 

108  ready  to  be  unloaded; 

73  unloaded. 

At  Springfield: 

134  ready  to  be  unloaded; 

33  unloaded. 

At  Ansonia: 

119  ready  to  be  unloaded; 

38  unloaded. 

At  Holyoke: 

141  ready  to  be  unloaded; 

61  unloaded. 

At  Danbury: 

82  ready  to  he  unloaded; 

59  unloaded. 


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At  Torrington: 

126  ready  to  be  unloaded; 

34  unloaded. 

At  Willimantic : 

38  ready  to  be  unloaded; 

37  unloaded. 

At  Boston: 

854  ready  to  be  unloaded; 

371  unloaded. 

At  Providence: 

2,000  ready  to  be  unloaded; 

832  unloaded. 

At  Worcester: 

195  ready  to  be  unloaded; 

149  unloaded. 

At  New  Bedford: 

251  ready  to  be  unloaded; 

53  unloaded. 

At  Fall  Biver: 

100  ready  to  be  unloaded; 

100  unloaded. 

At  Putnam: 

73  ready  to  be  unloaded; 

43  unloaded. 

At  Framingham: 

51  ready  to  be  unloaded; 

44  unloaded. 

At  Norwich: 

66  ready  to  be  unloaded; 

50  unloaded. 

In  other  words,  except  at  one  or  two  points,  nowhere 
near  the  number  of  cars  placed  ready  for  unloading 
were  released — which  shows  a gap  in  the  ability  of  the 
owners  of  the  freight  to  unload  cars.  There  is,  as  I 
say,  a lesson  to  be  learned  from  this  difficult  situation. 
It  is,  not  only  must  railway  facilities  be  increased,  but 
also  must  the  storehouse  facilities  and  the  handling  fa- 
cilities of  the  merchant  and  manufacturer  be  increased. 


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The  Providence  Journal,  commenting  on  the  situation, 
recently  had  quite  a strong  editorial  and  I will  read  part 
of  it  because  it  well  sets  forth  the  facts.  Among  other 
things  the  editorial  said : 

“In  parts  of  New  England  to-day  industries  are 
threatened  with  closure  for  want  of  raw  material, 
live  stock  faces  starvation  for  lack  of  fodder,  coal  is 
likely  to  be  quoted  at  a distressing  price  on  account 
of  the  inability  of  the  railroads  to  help  the  limited 
vessel  tonnage,  and  appeals  to  the  shipping  public  to 
release  freight  cars  fall  on  deaf  ears.  The  consignee 
pays  a dollar  a day  a car  for  demurrage  and  acts  as 
if  that  relieved  him  of  his  share  of  responsibility  for 
the  freight  congestion.  With  stocks  of  every  neces- 
sity of  life  that  must  be  brought  into  New  England 
depleted  by  the  embargoes  and  blockades,  the  rail- 
road and  the  public  also  face  the  threat  of  the  great- 
est and  most  complete  railroad  strike  in  history. 

“Practically  all  the  freight  that  comes  to  the  New 
Haven  Road  from  its  connections  must  be  given  ter- 
minal service  and  ends  its  journey  on  that  system. 
It  must  furnish  yard  room,  and  if  the  consignee  fails 
to  unload  it  the  road  can  do  no  more  than  charge  a 
dollar  a day  a car  unless  the  Interstate  Commerce 
Commission  permits  an  increase  in  the  rate.  ’ ’ 

We  had  one  case,  I am  sorry  to  say  it  was  at  Provi- 
dence, where  an  owner  held  ninety  cars  of  freight  on  the 
track  for  eighty-nine  days  and  paid  a dollar  a day,  but 
that  sum  didn ’t  reimburse  the  railway  nor  reimburse  you 
for  the  misuse  of  those  cars.  One  case  in  Connecticut  was 
where  300  cars  of  coal  were  brought  in,  bought  on  specu- 
lation and  disposed  of  at  the  rate  of  three  a day.  These 
things  are  very  bad,  they  hurt  you  and  they  hurt  every 
shipper  in  New  England.  Another  case  the  special  com- 
mittee has  just  taken  up,  was  where  three  cars  of  auto- 
mobiles, billed  order  notify,  were  held  for  a total  of 
138  days,  one  car  being  held  as  long  as  eighty-four  days. 
This  misuse  of  railway  facilities  does  harm  all  the  time 


8 


and  yet,  as  I say,  out  of  this  difficult  situation  we  may  be 
able  to  learn  a lesson  which  will  help  us  for  all  time  to 
come. 

Problems  of  Now,  you  gentlemen  are  in  the  manufac- 
Railways  and  turing  business  and  have  many  diffi- 

Manufacturers.  culties  similar  to  ours.  You,  perhaps,  do 

not  think  of  us  as  in  the  manufacturing 
business,  and  yet  we  are.  We  are  manufacturing  a 
diversified  product,  transportation,  which  is  scattered 
over  considerable  territory  and  subject  to  many  of  the 
conflicting  forces  that  your  business  is  subject  to.  But 
we  cannot  store  up  our  product  as  you  can.  We  had 
any  quantity  of  manufacturing  ability  last  July  to  pro- 
duce transportation,  for,  as  I have  said,  we  had  200 
engines  in  apple-pie  order  with  nothing  to  do,  but  we 
couldn’t  make  transportation,  put  it  away  and  have  it 
ready  for  you  this  winter;  and  this  transportation  ma- 
chine of  ours  is  now  out  of  gear  and  it  is  out  of  gear  be- 
cause our  product  is  not  getting  a price  commensurate 
with  the  cost  of  production.  It  would  be  well  for  you  who 
depend  so  largely  on  the  adequacy  of  the  transportation 
product  to  think  of  our  situation.  No  doubt  you  have,  hut 
it  is  so  important  a subject  that  I want  especially  to  bring 
it  to  your  attention. 

Heavy  Increase  in  In  1907  the  Interstate  Commerce  Corn- 
Transportation  mission  adopted  a uniform  set  of  ac- 
Output.  counts  for  the  railways  of  the  United 

States,  so  that  they  could  make  com- 
parisons on  the  same  basis,  and  these  accounts  are  sub- 
ject to  the  inspection  of  the  Commission  and  must  be 
sworn  to  by  a responsible  officer  of  the  railway  com- 
pany. We  have  every  reason  to  believe  that  they  are 
correct.  For  the  year  ending  June  30,  1915,  the  railways 
of  the  United  States  manufactured  of  the  product  they 
sell,  measured  in  the  units  we  use,  66,000,000,000  more  ton 
miles  than  they  did  in  the  year  ending  June  30,  1907 ; 66,- 
000,000,000  tons  hauled  one  mile  more  in  1915  than  in  the 


9 


year  ending  June  30,  1907 ! That  increase  was  thirty- 
three  times  as  much  as  the  entire  ton  mileage  handled  by 
the  New  Haven  system.  And  the  railways  of  the 
country  increased  during  the  same  period  their  pas- 
senger transportation  output  4,000,000,000  passengers, 
(hauled  one  mile,  which  is  three  times  as  much  as 
the  annual  passenger  transportation  product  of  the 
New  Haven.  The  owners  of  the  railways  in  the 
United  States,  in  order  to  furnish  that  product  to 
the  people,  put  into  the  plant,  $4,800,000,000 — nearly  $5,- 
000,000,000  new  money  for  additional  tracks,  new  build- 
ings, etc.,  for  the  period  mentioned.  Before  they  put 
in  the  $4,800,000,000  the  owners  had  $760,000,000  left, 
after  paying  expenses  and  taxes,  for  betterments  and  im- 
provements and  for  a return  on  their  investment.  After 
putting  the  $4,800,000,000  into  the  plant  in  order  to  fur- 
nish the  United  States  this  additional  transportation  pro- 
duct they  had  $739,000,000  left,  or  $21,000,000  less  than 
nearly  ten  years  before.  This  presents  a very  important 
situation  to  the  country  and  to  all  who  must  have  the 
transportation  product  for  the  success  of  their  business. 
As  business  men,  you  know  that  people  will  not  continue 
to  put  money  into  any  business  if  they  get  no  return  on  it, 
and  this  is  one  of  the  reasons  to-day  why  railway  facilities 
throughout  the  United  States  are  inadequate;  why  your 
coal  is  not  coming  in  as  fast  as  you  want  it,  and  why  your 
product  is  not  going  out  promptly.  It  isn’t  only  a New 
England  matter.  It  is  a national  situation. 

As  your  toastmaster  said,  the  difficulties  here  in  New 
England  have  been  accentuated  by  various  happenings 
of  which  the  papers  have  spoken  much  during  the  last 
few  years.  But  apart  from  those  matters  the  inadequacy 
of  railway  facilities  is  a national  problem.  The  great 
Pennsylvania  Railroad,  which  has  not  had  some  of  the 
troubles  of  the  New  Haven,  also  has  had  trouble  in  mov- 
ing its  business.  It  has  to-day  on  its  rails  nearly  10,000 
cars  of  freight  for  points  on  the  New  Haven  Road, 
which  we  are  ready  to  take.  We  have  for  the  time  lifted 
the  embargoes  and  yet  the  Pennsylvania  is  having  diffi- 


10 


culty  in  sorting  out  those  10,000  cars  from  the  twenty  or 
thirty  thousand  other  cars  on  its  lines  and  moving  them 
up  to  the  proper  junction  points  on  our  lines.  I repeat 
the  whole  subject  is  one  of  great  national  concern. 


The  New  Haven  I walked  and  drove  over  the  terminal 
Ought  to  Spend  situation  here  to-day.  Your  good  friend 
Millions.  and  my  good  friend,  Mr.  Brooker,  took 

me  about,  and  I also  saw  that  beauti- 
ful town  of  Derby,  and  all  the  track  facilities.  We 
should  spend  a lot  of  money  here;  we  know  it,  and  we 
should  spend  a lot  of  money  at  many  other  points  on  the 
New  Haven  Road.  A low  estimate  of  what  the  New 
Haven  Road  should  spend  to  be  able  to  turn  out  a first- 
class  article  of  transportation  in  New  England  territory 
is  probably  $30,000,000 ; more  likely  $50,000,000. 

I believe  we  are  to  increase  our  business.  In  the  period 
from  1903  to  1914  the  transportation  output  of  the  New 
Haven  Road  increased  between  40  and  44  per  cent.,  and 
it  is  going  to  increase  in  the  nest  ten  or  twelve  years  an 
additional  30  to  40  per  cent,  if  yon  and  men  like  you,  and 
the  people  generally  throughout  the  United  States,  will  see 
to  it  that  the  transportation  agencies  are  able  to  increase 
their  facilities ; but  it  is  going  to  take  money  and  it  cannot 
be  done  simply  by  one  railway  improving  its  facilities, 
because  a chain  is  no  stronger  than  its  weakest  link.  If 
we  should  improve  our  lines  and  the  New  York  Central 
and  the  Pennsylvania  were  blocked  it  would  not  help 
very  much,  or  if  they  improved  their  lines  and  we  did  not 
improve  ours  it  would  not  help  very  much. 


The  New  I want  to  say  a few  words  about  the 

Labor  Demands.  labor  situation.  I told  you  we  have  had 

thirty-four  strikes  since  the  twenty- 
fourth  day  of  August ; and  you  have  had  your  own  labor 
troubles.  The  labor  problem  is  also  a great  national 
problem.  The  New  York  Times  on  March  31  had  a very 


11 


good  editorial  on  the  subject.  I want  to  read  briefly  a 
part  of  it  because  it  puts  the  situation  in  a very  thought- 
ful way.  It  says : 

“All  the  money  a railroad  takes  in  is  for  passen- 
ger and  ton  miles.  A railroad  does  not  sell  its  trains ; 
it  sells  only  their  capacity.  What  it  gets  from  the 
passengers  and  tons,  which  occupy  that  capacity,  is 
out  of  its  control  entirely.  Bates  are  made  by  State 
laws  or  by  the  Interstate  Commerce  Commission. 
Unable  to  control  its  income  the  railroad  has  all  the 
greater  reason  to  look  to  the  cost  of  its  train  miles — 
that  is,  to  the  control  of  its  outgo.  If  it  should  lose 
control  of  its  outgo,  having  already  lost  control  of  its 
income,  it  would  obviously  be  in  a parlous  condition, 
but  exactly  that  is  taking  place. 

“The  largest  factor  of  cost  in  the  production  of 
train  miles  is  wages  and  it  is  becoming  altogether 
uncontrollable.  The  men  engaged  in  train  service  de- 
mand with  increasing  frequency  more  pay  for  less 
time  under  threat  of  going  on  strike.  They  are  per- 
suaded at  the  last  moment  to  accept  arbitration,  and 
invariably  the  matter  is  compromised.  The  men  get 
less  than  they  demanded,  but  more  than  the  railroads 
were  willing  to  give.  Less  than  two  years  ago  that 
last  occurred.  Now  400,000  men  are  again  threaten- 
ing the  companies  with  a calamity  that  cannot  be  al- 
lowed to  happen,  and  in  order  to  prevent  the  rail- 
roads from  putting  in  counter-proposals,  as  they  did 
in  1914,  the  unions  lay  down  flatly  that  only  the  pro- 
posals which  they  themselves  present  are  open  to  dis- 
cussion. Any  that  the  railroads  may  wish  to  present 
are  declared  beforehand  to  be  undeserving  of  consid- 
eration by  the  unions.  It  seems  necessary  to  re-state 
these  simple  facts  in  order  to  bring  the  situation  into 
perspective.  Let  us  look  at  it  in  a sense  of  formal 
fairness,  waiving  all  the  merits.  A combination  of 
400,000  men  deliberately  menaces  the  comfort,  safety 
and  general  well-being  of  society,  in  order  to  get 


12 


more  pay  and  then  would  limit  the  discussion  to  the 
very  point  of  its  demands.  The  railroads  say  ‘we 
want  to  be  heard  on  questions  touching  the  fairness 
of  existing  rates,  rules  and  conditions  of  labor  in  the 
railway  serviced  The  unions  say  ‘rates,  rules  and 
conditions  not  specifically  affected  by  our  present 
demands  shall  remain  unchanged,  they  are  not  open 
to  discussion.’  What  can  the  railroads  do?  They 
cannot  strike.  There  is  no  court,  no  tribunal  where 
they  may  get  a hearing  and  obtain  relief.  They  can- 
not reduce  wages,  equalize  them  or  control  them  at 
all.  The  employees  control  wages,  subject  to  arbitra- 
tion, in  which  they  always  win  something. 

“In  the  circumstances,  if  you  were  a railroad 
what  would  you  do?  You  would  wish  no  doubt  to  sell 
not  only  your  ton  and  passenger  miles,  but  your 
trains  as  well,  hut  that  you  couldn’t  do.  One  of  the 
many  things  a railroad  cannot  do  is  to  liquidate  and 
quit.  If  you  were  a railroad  you  would  do  perhaps 
as  the  railroads  do.  You  would  do  the  best  you 
could.  ’ ’ 


We  cannot  wind  up  our  business,  we  cannot  give  it  up, 
we  are  here  to  serve  you  and  we  must  have  your  help.  It 
is  not  a question  just  now  of  whether  the  men  are  getting 
too  much  or  too  little;  it  is  a great  problem  of  national 
importance  whether  this  transportation  factory  can  go 
on  and  manufacture  the  product  you  must  have  if  you 
are  to  increase  your  output.  If  it  is  fair  and  right  to 
raise  the  compensation  of  those  400,000  men  25  per  cent., 
who  is  to  say  that  it  is  not  equally  fair  and  right  to  raise 
the  compensation  of  the  1,200,000  or  1,400,000  other  men 
in  the  railway  service,  and  who  can  justly  say  they  are  not 
equally  deserving?  A 25  per  cent,  increase  in  the  payrolls 
of  the  railways  of  the  United  States  would  put  many  of 
them  into  bankruptcy  and  would  stop  all  additions  nec- 
essary to  the  plant  if  it  is  to  give  you  the  product  you 
must  have.  In  this  connection  I believe  thoughtful  con- 


13 


sideration  should  be  given  to  the  selection  of  men  to 
public  office,  to  commissions  and  to  the  legislatures. 

Duty  to  Perhaps  it  is  not  unnatural  for  you  to 

Investors.  say  this  matter  is  not  our  business,  but 

rather  is  it  the  business  of  the  rail- 
way managements  to  attend  to  the  problems  confronting 
them.  What  is  the  management  of  a railway?  The 
railway,  as  I say,  is  a great  big  piece  of  machinery 
created  by  thousands  of  people.  Take  the  New  Haven 
Road  as  an  example.  About  28,000  stockholders 
and  probably  20,000  bondholders,  or  at  least  45,000  in- 
dividuals own  that  great  manufacturing  plant.  They 
hope,  as  do  you  in  your  manufacturing  plants  for  a re- 
turn on  their  product.  They  select  a board  of  directors 
to  manage  the  property,  and  the  board  has  to  meet  many 
conflicting  forces.  The  directors  have  the  interest  of  the 
owners  at  heart,  and  the  owners  are  entitled  to  some  re- 
turn on  their  investment.  If  the  owners  are  note  holders 
or  bond  holders  they  are  entitled  to  their  interest  and  to 
the  safeguarding  of  their  investment  and  if  they  are 
stockholders  they  are  like  your  stockholders  in  the  manu- 
facturing business — they  hope  for  a dividend.  The 
directors  and  management  must  try  to  furnish  the  trans- 
portation, and  they  have  as  well,  a duty  to  the  employee. 

It  is  a trying  time  in  the  world  just  now.  All  business 
is  surrounded  by  conflicting  forces,  as  well  as  the  country 
at  large.  It  seems  at  times  very  difficult  for  us  to  say 
what  any  one  man  or  group  of  men  can  do  with  these 
large  business  questions  confronting  the  nation. 

I have  a little  quotation  which  I keep  on  my  desk  at 
home  because  it  always  appeals  to  me;  something  that 
Mr.  Huxley  said.  It  is  no  doubt  familiar  to  many  of  you, 
but  it  emphasizes  the  point  I am  trying  to  make  regard- 
ing the  great  forces  now  at  work  and  of  the  great  game  in 
which  we  are  all  engaged. 

Mr.  Huxley  said : 

“The  life,  the  fortune  and  the  happiness  of  every 
one  of  us  and  more  or  less  of  those  who  are  connected 


14 


with  us  do  depend  upon  our  knowing  something  of 
the  rules  of  a game  infinitely  more  difficult  and  com- 
plicated than  chess.  It  is  a game  which  has  been 
played  for  untold  ages,  every  man  or  woman  of  us 
being  one  of  two  players  in  a game  of  his  or  her  own. 
The  chess  board  is  the  world,  the  pieces  the  phe- 
nomena of  the  universe,  the  rules  of  the  game  are 
what  we  call  the  laws  of  nature,  the  player  on  the 
other  side  is  hidden  from  us.  We  know  that  his  play 
is  always  fair,  just  and  patient.  But  also  we  know 
to  our  cost  that  he  never  overlooks  a mistake  or 
makes  the  smallest  allowance  for  ignorance.  To  the 
man  who  plays  well  the  highest  stakes  are  paid  with 
that  sort  of  overflowing  generosity  which  the  strong 
shows  delight  in  strength.  And  one  who  plays  ill  is 
checkmated  without  haste,  but  without  remorse.  ’ ’ 

We  are  all  trying  to  play  that  game,  but  all  are 
human  and  make  mistakes.  The  directors,  the  offi- 
cers, myself  and  the  officers  associated  with  me,  the  junior 
officers  all  down  the  line — I honestly  believe  are  trying  to 
do  the  best  they  can  with  the  great  difficulties  confront- 
ing them.  The  task  in  which  they  are  engaged  cannot  be 
solved  unless  we  have  a better  public  opinion  concerning 
the  railway  business,  a public  opinion  that  is  the  result 
of  thoughtful,  careful,  prudent  study.  With  the  help  of 
a public  opinion  so  framed  I believe  we  can  solve  these 
problems ; but  if  we  cannot  solve  them  I am  fearful  that 
we  will  have  more  difficulties  before  we  get  out  of  the 
woods. 

Commissioner  As  I have  said,  I call  our  business  a great 
Daniels  on  a manufacturing  business,  similar  in  many 
Living  Wage.  respects  to  yours.  Mr.  Daniels,  one  of 
the  members  of  the  Interstate  Com- 
merce Commission,  has  said  a good  and  perfectly  obvious 
thing,  namely,  that  the  railway  is  entitled  to  a living 
wage;  in  other  words,  the  laborer  is  worthy  of  his  hire. 


15 


Mr.  Daniels,  in  the  so-called  5 per  cent,  rate  case,  made 
an  excellent  statement  as  to  the  absolute  necessity  of 
supporting  the  railways  if  they  are  to  serve  the  public 
as  the  public  should  be  served.  He  said: 

“The  world-wide  phenomenon  of  rising  prices  is 
by  this  time  no  novelty.  Since  1906  the  average  rise 
in  the  world’s  price  level  is  estimated  by  competent 
statisticians  at  from  30  per  cent,  to  50  per  cent.  It 
has  mirrored  itself  in  the  rising  cost  of  living ; it  has 
evoked,  and  most  properly,  advance  in  wages  and 
salaries,  it  has  coincided  with  an  increase  in  the  nom- 
inal rate  of  interest,  where  part  of  the  interest  so- 
called  is  but  compensation  for  the  anticipated  depre- 
ciation of  the  capital  sum  later  to  be  repaid.  This 
rise  in  the  price  level  must  eventually  be  reckoned 
with  in  railroading.  For  a time  its  effects  may  be 
masked  by  adventitious  increases  in  the  volume  of 
traffic,  but  this  temporary  relief  in  its  very  nature  is 
uncertain,  and  sooner  or  later  the  difficulty  is  sure  to 
reappear.  For  a time  it  may  be  circumvented  by 
extraordinary  economies,  but  in  its  nature  it  is  in- 
exorable. It  must  be  faced,  not  trifled  with.  It  is 
hardly  an  adequate  remedy  to  accord  to  carriers 
relief  only  when  their  returns  have  reached  the  well- 
nigh  desperate  level  now  shown  in  central  freight 
association  territory.  Even  before  this  inadequate 
return  was  evidenced  higher  rates  were  warranted. 
Such  a solution  of  the  present  case  would  have  done 
no  less  than  justice  to  the  carriers  and  would  have 
promoted  the  welfare  of  the  community  they  serve. 

“A  living  wage  is  as  necessary  for  a railroad  as 
for  an  individual.  A carrier  without  a sufficient 
return  to  cover  costs  and  obtain  in  addition  a margin 
of  profit  large  enough  to  attract  new  capital  for  ex- 
tensions and  improvements  cannot  permanently 
render  service  commensurate  with  the  needs  of  the 
public.  ’ ’ 


16 


Big  Increase  We  have  been  confronted  with  very 
in  Prices  of  large  increases  in  the  prices  paid  for 

E.  B.  Materials.  materials  since  the  Commission’s  last 

freight  rate  opinion. 

A short  time  ago  the  St.  Lonis  and  San  Francisco 
Railway  made  a careful  compilation  of  the  cost  of  thirty- 
six  classes  of  materials  the  company  used.  I take  it  their 
figures  would  probably  not  be  very  far  out  of  the  way 
of  those  of  other  railways.  They  found  that  the  thirty- 
six  classes  of  materials  they  had  to  use  in  the  manufac- 
ture of  their  product  showed  increases  in  cost  of  from  80 
to  700  per  cent,  over  two  years  ago.  Of  course,  the  700 
per  cent,  item  was  for  a special  article,  but  let  us  sup- 
pose the  average  increase  to  be  25  or  30  per  cent.  We  all 
know  there  have  been  marked  increases  in  the  prices  of 
railway  materials. 

Passenger  Train  Let  me  give  you  some  very  simple 
Service  at  a Loss,  figures  as  to  the  passenger  service  of 
the  New  Haven  Road.  Your  passenger 
service,  as  I know  to  my  sorrow,  has  not  been  satisfactory 
and  yet  it  is  not  remunerative  to  the  railway — very  little 
of  it  is,  but  it  is  necessary  for  the  general  development  of 
the  whole  territory.  For  the  eight  months  ending  Febru- 
ary 29  the  passenger  trains  running  on  the  New  Haven 
Road  earned  $2.22  per  mile.  That  was  one  of  the  highest 
average  earnings  per  train  mile  in  the  United  States. 
The  New  Haven  is  a great  carrier  of  passengers,  and 
those  who  do  not  study  railway  figures  would  say  that 
that  record  was  fine,  and  we  were  making  lots  of  money. 
But  let  me  remind  you  that  the  average  cost  of  running 
all  the  trains  for  the  same  eight  months  was  exactly  $2.22 
per  train  mile.  The  average  cost  of  passenger  train 
service,  eliminating  all  questions  of  maintenance  and 
applying  only  what  we  call  transportation  costs,  station 
service,  engine  service,  train  service,  is  $1.21;  but  we 
must  remember  that  the  passenger  trains  are  wearing  out 
the  railway  just  as  much  as  the  freight  trains ; and  .the 
equipment  must  be  kept  in  order,  and  more  and  better 


17 


cars  must  be  purchased.  The  February  earnings  per  pas- 
senger train  mile  were  $2.14,  and  the  average  expenses 
$2.46. 

It  would  seem  as  if  you  must  face  and  we  must  face, 
if  we  are  to  go  on  adding  to  our  plant  in  such  a way  that 
we  can  produce  a better  quality  of  transportation  and  in 
greater  quantity,  some  increase  in  rates.  Perhaps  if 
the  weather  improves  and  things  clear  up  somewhat  our 
expenses  will  not  seem  so  appalling;  but  you  must  re- 
member we  have  to  pay  higher  prices  for  fuel  and  all 
materials  and  continued  large  increases  in  wages;  and  I 
cannot  see  any  way  out  except  by  an  increase  in  rates 
unless  New  England  is  to  be  satisfied  with  a postpone- 
ment of  improvements  for  perhaps  an  indefinite  period.  I 
hope  we  will  not  have  to  do  that,  because  there  is  so  much 
to  be  done  to  make  our  plant  satisfactory. 


Railways  Need  In  the  country  there  are  many  move- 
Help  of  the  ments.  We  have  agricultural  con- 

People.  gresses,  good  roads  congresses  and  up- 

lift congresses.  There  are  all  sorts  of 
movements  in  the  interest  of  the  public  welfare,  and  yet 
there  is  not  enough  thought  given  by  the  public  at  large 
to  the  very  serious  transportation  problem.  It  needs  not 
only  the  help  of  the  thousands  of  men  in  the  railway 
service,  but  it  needs  the  help  of  the  people.  I know  many 
of  the  railway  men,  and  I think  that  99.9  per  cent,  are 
animated  by  a high  purpose  to  serve  not  only  their 
railways  but  to  do  their  duty  to  the  public.  The  railways 
are  your  servants.  All  the  money  they  collect  comes 
from  you  and  in  return  most  of  it  is  passed  right  back  to 
the  New  England  communities  in  payment  of  wages  and 
taxes  and  for  materials.  The  great  bulk  of  the  money 
collected  goes  right  back  to  the  New  England  people 
except  the  money  spent  for  coal  and  certain  metallic 
articles.  We  must  have  a living  return.  If  we  don’t  have 
it  we  cannot  add  to  our  plant ; we  cannot  give  you  what 
you  want  and  that  is  going  to  hurt  us  all. 


18 


I have  tried  to  point  out  some  of  our  difficulties.  They 
are  not  unusual;  similar  difficulties  confront  you,  but 
you  are  able  to  meet  them  because  you  can  and  do  raise 
the  price  of  your  product.  At  the  present  time  the  rail- 
ways need  great  forbearance  and  much  help  if  they  are 
really  and  truly  to  push  the  country  forward  to  bear  the 
great  burdens  of  the  business  onrush  imposed  by  the  con- 
ditions of  the  foreign  war. 


High  Type  of  I am  glad  to  have  an  opportunity  to  come 
New  Haven’s  Men.  here  and  say  this  much  to  you.  It  is,  as  I 
have  already  remarked,  helpful  to  us  who 
are  at  headquarters  much  of  the  time  to  get  about  and 
meet  our  patrons  face  to  face.  We  try  to  have  on  guard  all 
over  our  road  honest  men,  high-minded  men,  men  of 
capacity,  men  of  sincerity.  I believe  in  the  men  we  have, 
the  36,000  men  on  this  great  railway.  There  are  some, 
of  course,  who  are  no  more  perfect  than  those  in 
other  walks  of  life.  We  know  we  have  our  shortcomings 
and  we  wish  we  could  overcome  them.  There  are  only 
about  100  officers  and  we  have  several  million  cus- 
tomers, but,  as  I say,  we  try  to  have  the  men  at 
stations  and  on  the  divisions  do  the  best  they  can  with 
the  facilities  with  which  they  are  furnished.  You  had 
here  for  a long  time  Mr.  Judson  as  agent.  He  did  good 
work  for  you  and  for  the  railway.  He  was  finally  worn 
out  and  has  been  retired  on  a pension.  Mr.  McArthur 
is  a zealous,  active  man,  trying  to  please  you.  His  head 
and  heart  want  to  do  it,  but  he  cannot  always  accom- 
plish all  that  you  desire.  And  you  have  Mr.  Casey,  the 
yardmaster ; he  wants  to  do  the  best  he  can ; and  Mr. 
Moran,  the  ticket  man;  all  want  to  do  the  best  they  can. 
They  want  to  bring  all  complaints  to  their  superior,  Mr. 
Miller,  and  he  in  turn  submits  them  to  Mr.  Hroege,  and 
so  on  up  to  the  management. 

Our  ability  to  improve  the  service  is  limited  by  the 
money  question.  We  must  have  earnings  and  we  must 
have  credit  to  bolster  us  up  so  that  we  can  add  to  our 


19 


facilities.  We  have  been  through  a stormy  time  to  save 
the  company  from  what  seemed  at  one  time  almost  certain 
dissolution. 

I am  glad  always  to  have  an  opportunity  to  talk  to  a 
body  of  business  men  like  the  Ansonia  Chamber  of  Com- 
merce. I think  the  railway  problems  to-day  are  more  im- 
portant in  their  ultimate  effect  upon  the  future  of  this 
country  than  was  the  silver  question  which  was  fought 
so  effectively  in  1896,  and  with  this  in  mind  let  me 
ask  you  to  consider  the  seriousness  of  the  railway  situa- 
tion and  to  do  what  you  can  with  your  members  of  the 
Legislature,  your  Senators,  your  members  of  the  House, 
your  Railway  Commissioners,  and  your  government  to 
point  out  some  of  the  great  difficulties  confronting  all 
business,  and  particularly  the  transportation  business. 
They  cannot  be  cured  by  the  railway  managements  alone 
— the  cure  must  come  through  the  joint  action  of  the 
railway  managements  and  the  great  public  that  the  rail- 
way managements  are  honestly  trying  to  serve. 


20 


